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Post Info TOPIC: Insurance payout


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Insurance payout
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One of my clients has received a cheque from an insurance company in settlement of a repair caused by a third party.  I am a little unsure how to treat this.  Should I treat it all as income, offset it against expenses on car repairs, or both given what I say below?

The repair bill is £280 and the settlement was £360 to cover my clients time in gettng the vehicle to and from the garage, some 20 miles away.

I am inclined to go for the third option but would welcome comments.

Thanks

 

John



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Expert

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Hi John

I would go with your 3rd option.  Net £280 against car repair expense and show the balance of £80 as miscellaneous income.

At the end of the day how you show it doesnt really matter as the end result is that the bottom line profit will be £360 higer (or the loss £260 lower).

Regards

MarkS



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Mark Stewart CA

http://stewartaccounting.co.uk/

Providing accounting, bookkeeping, payroll and tax services to small and medium sized businesses across Central Scotland and beyond.



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Many thanks Mark.

 

Regards

 

John



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